[HN Gopher] Ex-congressman convicted of insider trading before T...
___________________________________________________________________
Ex-congressman convicted of insider trading before T-Mobile merger
with Sprint
Author : perihelions
Score : 85 points
Date : 2023-09-20 18:23 UTC (4 hours ago)
(HTM) web link (www.nbcnews.com)
(TXT) w3m dump (www.nbcnews.com)
| Racing0461 wrote:
| what about "current congressman"?
| mc32 wrote:
| Of course, they are allowed[1], why would they be bound by the
| laws that govern the governed?
|
| [1]https://blogs.luc.edu/compliance/?p=4459
| elintknower wrote:
| Ah, so as long as you keep getting elected you won't be
| charged... that's the new game...
| atdrummond wrote:
| This is a frustrating title. While it is technically true, it
| elides some important information and context:
|
| - He had been out of Congress for over 8 years at the time of the
| Sprint/T-Mobile merger.
|
| - He made considerably larger gains (2x, $100k more nominally) on
| his Navigant insider trade.
|
| - None of his insider trading was related to either Congress
| directly or congressional info on the named merger, as one might
| infer from the title.
|
| Why not "Former Rep. Turned Consultant Illegally Traded On Client
| Info From T-Mobile And Navigant" or something similar but more
| concise?
| whoiscroberts wrote:
| Why not? To give the impression to 'headline only' readers that
| congress people do in fact get in trouble for insider trading.
| jrockway wrote:
| The thing that always gets the insider traders is using non-
| public information. Is there an approved way to make the
| information public, so you can trade right after you do that?
| Like, nobody is going to trust you, so it probably won't make the
| price change much. But, the information was technically public.
| The question I have is, what does "public" mean?
| mandevil wrote:
| This sounds like a particularly common failure mode for
| software engineers in dealing with the law. In software
| engineering, we have strict rules, and most of our thoughts are
| devoted to exception handling, so we're thinking about
| exceptions and what the behavior of the system will be in
| unusual cases.
|
| Law doesn't work that way. If you try and build a clever but
| hacky argument they don't care. They don't say "what a clever
| hack, you got us, you're free to go." They arrest you and
| charge you and _maybe_ after your life is ruined by the expense
| of your legal defense, you don 't actually have to go to prison
| (presuming you got bail for the 12-18 months it took for your
| case to wend through the courts)! Congratulations, you won your
| case! That's the good outcome! See, the law is enforced by
| people, not rules- it's the police, the prosecutors, the judges
| and the juries who uphold the law, not straightforward and
| simple software code. And people (very much including juries!)
| can tell what the intent of a law is, and they will (most of
| the time) enforce the intent of that law. Schemes to try and
| game the laws? That looks an awful lot like a guilty conscience
| which is sometimes a required factor in whether a crime was
| committed (especially on the sorts of financial crimes we're
| talking about here).
|
| As for the actual law defining what public disclosure is, it's
| Regulation Fair Disclosure (https://www.federalregister.gov/doc
| uments/2000/08/24/00-2115... or
| https://www.ecfr.gov/current/title-17/chapter-II/part-243). As
| I understand it, basically, the key step is that you file a 8-K
| form with the SEC who takes responsibility for publishing it
| widely, and there are rules on blackout periods for insider
| transactions around the filing of those 8-K's, but I'm not a
| lawyer, definitely don't treat what I say as legal advice, I
| just had to sit through lectures on this back when I worked as
| an engineer for a financial firm.
| jeffbee wrote:
| You'd have to abide by Reg FD[1] in making such a disclosure
| and you also must wait a "reasonable" time before trading on
| the disclosed information, which is why insider trading windows
| don't open for one or several days after a company announced
| earnings, for example.
|
| 1: https://www.investor.gov/introduction-investing/investing-
| ba...
| jrockway wrote:
| That makes sense. Everyone has always come up with my scams
| before ;)
| toomuchtodo wrote:
| https://www.justice.gov/usao-sdny/pr/former-congressman-sent...
|
| https://en.wikipedia.org/wiki/Steve_Buyer
| kube-system wrote:
| I love the nominative determinism. He was an early buyer.
| alwaysrunning wrote:
| Ah, the things you get to hear as a consultant.
| olliej wrote:
| He was not a congressman at the time he did this.
|
| It's absurd that if he made use of the same secret information
| but while employed as a congressman (even if he was overseeing
| the merger) would mean he was fine.
| kasey_junk wrote:
| This is a weird myth that has been debunked repeatedly:
| https://www.everycrsreport.com/files/20170412_RS21127_36174d...
|
| Congress people and their staff are not immune from insider
| trading rules and in fact there is an explicit law saying so.
| pseg134 wrote:
| Sure, but they are not considered "insiders" when trading on
| non public information obtained during their official duties.
| So sure, if his wife told him about her company's merger he
| could go to jail. You are either ignorant or willfully
| misleading people.
| kasey_junk wrote:
| Lots of people aren't considered insiders when trading on
| non public information obtained during their official
| duties. Congress people aren't held to a different standard
| here.
|
| If you want to argue that they should be held to a higher
| standard that's reasonable but the way the comment was
| worded suggested there is some extra immunity for Congress.
| Which there isn't.
| fsckboy wrote:
| well then, you are either educated/intelligent, or
| thoughtfully trying _not_ to mislead people! which one is
| it, buddy!?
|
| what is the definition of non-public information in the
| context of congress and corporate "inside" information?
| If the congressional subcommittees get briefed on the
| Covid crisis or trade laws or policy, they might have
| advance knowledge that companies themselves don't have.
| Or if a company insider reveals information to
| subcommittees, is that actually making the information
| public?
| riotnrrd wrote:
| If you're curious, you can read the relevant laws
| yourself. I suggest you start with the STOCK act of 2012
| (S. 2038, 126 Stat. 291, enacted April 4, 2012). This law
| prohibits the use of non-public information for private
| profit, including insider trading by members of Congress
| and other government employees. You can also follow up
| with the relevant SEC definitions of "non public
| information."
| peyton wrote:
| It's a $200 fine for a failure to file. 10% penalty for
| prohibited trades. Enforcement is at ethics committee
| discretion. Those aren't the rules normal people have to
| follow. Maybe people have a problem with that?
| kasey_junk wrote:
| Those are _more_ rules than normal people have to follow.
| The whole point is there is no special exemption for
| Congress though people seem to think there is.
|
| Should there be even more strict rules for Congress than
| there are? Sure! But it's not because they currently
| aren't subject to insider laws.
| kasey_junk wrote:
| The SEC is currently pursuing a very expansive definition
| of insider trading (and are losing some cases because of
| it). I'm extremely nervous about stating definitively
| what they think is illegal insider trading.
|
| That said, historically one of the things US* insider
| trading requires "breach of a fiduciary duty or other
| relationship of trust and confidence". Trading on
| material non-public information is not enough, there must
| be a relationship, there is a whole industry of people
| devoted to trading on material non-public information.
| They just have to get it without that breach.
|
| So the argument for congress people (presumably, I'm not
| an securities lawyer) would be that most of the
| information they receive they do not receive via a
| fiduciary relationship or one of trust and confidence. Or
| that by Congress getting it, it becomes part of the
| public record. Though I can certainly see
| sealed/confidential testimony going the other way.
|
| *This is an important distinction. In the US insider
| trading laws aren't about protecting the markets, they
| are about protecting shareholders. Its more about theft
| than market manipulation. European laws can have a
| completely different basis.
| jeffbee wrote:
| Amazing how much risk a person will accept for only $300k in
| profits. Guy was an attorney and ex-Congressman who could have
| scared up that amount of money in no time.
| pcurve wrote:
| Maybe he thought the small amount would let him fly under the
| radar.
| tester756 wrote:
| >who could have scared up that amount of money in no time.
|
| What makes you think so?
| diogenes4 wrote:
| For one example, see Barney Frank, co-author of the Dodd-
| Frank act. After retiring from congress he found himself with
| a board role on Signature Bank. Over the seven years he
| "worked" there he accumulated around $1M in salary + equity.
|
| Or for another example, see the Hunter Biden/Burisma story. I
| think the media coverage of this is mostly partisan quackery,
| but it's a useful illustration here as to how you can make a
| good deal of money _just being vaguely associated with
| american politicians_. Hunter is certainly not unusual in
| this regard.
| [deleted]
| colechristensen wrote:
| This isn't as interesting as the headline makes it seem. He had
| not been in Congress a years when the insider trading took place.
| fatfingerd wrote:
| Looks like he stepped down to stop investigations into the
| Frontier Foundation, a scam NGO for nepotism and transfers of
| wealth?
| infamouscow wrote:
| > scam NGO
|
| The word "scam" is a redundant modifier for an NGO :)
| asoneth wrote:
| > a scam NGO for nepotism and transfers of wealth
|
| I thought you might be exaggerating, but if the wikipedia
| entry is to believed it seems like a pretty obvious case of
| laundering bribes:
|
| "In 2003, Buyer created The Frontier Foundation, whose stated
| purpose is educational funding for college students ...
| Buyer's daughter Colleen was the president ... His son Ryan,
| in 2009, was director ... the foundation shared an office
| with Buyer's campaign office ... annual fundraising golf
| outings had raised more than $880,000 for the foundation.
| Almost all the contributions were from 20 companies and trade
| organizations that had interests before the House Energy and
| Commerce Committee, of which Buyer is a member ... In 2018,
| the Frontier Foundation was closed by Buyer, the only listed
| officer, without ever having funded a scholarship."
|
| Excerpts from: https://en.wikipedia.org/wiki/Steve_Buyer#Fron
| tier_Foundatio...
| fatfingerd wrote:
| He seems to have played all the important roles for
| violating lobbying ethics, and probably wasn't consulting
| at a tobacco and then telco company out of coincidence,
| either his presence or his purpose would have been a
| facilitation of laundering.
|
| 22 months is embarrassing, that no other agency could put
| him away first is even more embarrassing.
| chews wrote:
| Funny enough had he been in Congress he'd be in the clear.
| simplicio wrote:
| Why? Chris Collins was convicted of insider trading while in
| congress just a few years ago. I don't think there's any
| special protections for Congress-folk from insider trading
| laws.
| edgyquant wrote:
| It's just a talking point people like to parrot
___________________________________________________________________
(page generated 2023-09-20 23:02 UTC)